Virginia Pain Management Practices to Pay $3.29 Million to Settle Allegations that Fraudulent Claims for Payment Were Submitted to the U.S. Government

April 25, 2019

Whistleblower in False Claims Act case alleged former employer overcharged the government for services and ordered unnecessary drug tests paid for by the government

The United States Government has reached a settlement of approximately $3.3 million with Physical Medicine Associates, Ltd. (PMA) and PMA’s practice management company National Spine and Pain Centers, LLC (National Spine) to resolve False Claims Act allegations filed by a whistleblower. PMA, which operates several pain management practices in Virginia that do business as National Spine & Pain Centers, was alleged to have overcharged Medicare, TRICARE, and the Federal Employees Health Benefits (FEHB) Program for medical services and ordered quantitative urine drug tests that were medically unnecessary and which were billed to the federal health care programs.

The whistleblower, Michelle O’Connor, a physician assistant and former PMA employee, filed the civil lawsuit in the U.S. District Court for the Eastern District of Virginia in 2015 and is represented by national plaintiffs’ law firm Cohen Milstein Sellers & Toll PLLC. The case is captioned United States of America ex rel. Michelle O’Connor v. National Spine and Pain Centers, LLC, et al., No. 3:15-cv-00551 (E.D. Va.).

The settlement covers three kinds of unlawful conduct that allegedly occurred at various times going back to 2010: (1) billing for services performed by physician assistants and nurse practitioners as “incident to” a physician’s service when the services actually performed did not qualify as such, resulting in the government overpaying for the services; (2) submitting claims for urine drug tests that were in violation of the Stark Law and/or the Anti-Kickback Statute and therefore ineligible for reimbursement by the government; and (3) referring patients for medically unnecessary “quantitative” urine drug tests performed and billed to the government by third-party laboratories.

“This settlement illustrates the positive impact that one brave person can have if they step forward when they believe that the government has been cheated and taxpayer dollars wasted,” said Jeanne Markey, partner atCohen Milstein Sellers & Toll and co-lead counsel for O’Connor.

The federal government intervened in the whistleblower’s action and settled with PMA and National Spine on April 19, 2019. Fourteen other defendants named in the whistleblower’s 2015 complaint are being dismissed as part of the settlement agreement.

“This settlement is a positive achievement for patients and taxpayers, and I’m grateful for the government’s commitment to securing a just resolution,” said Michelle O’Connor, the whistleblower in the case.

In settling, the defendants did not admit liability.

The federal False Claims Act and its state law equivalents permit private citizens to bring lawsuits on behalf of the government against persons who present false or fraudulent claims for payment under government contracts or programs, such as Medicare, TRICARE, and the FEHB Program. Whistleblowers, like the individual who brought this lawsuit, are entitled to receive a portion of the proceeds of any settlement or judgment awarded against a defendant.

Cohen Milstein’s Whistleblower/False Claims Act practice group has decades of experience successfully pursuing whistleblower cases under the federal and state false claims act statutes in the healthcare, pharmaceutical, and defense contractor industries, and in other industries that transact business with the government. In 2016, they represented one of two whistleblowers in United States et al. ex rel. Lauren Kieff, v. Wyeth, which resulted in one of the largest qui tam settlements in U.S. history – Wyeth agreed to pay $784.6 million to the U.S. government and the over 35 intervening states.